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In General, an S Corporation Shareholder Makes Increasing Adjustments to Her

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In general, an S corporation shareholder makes increasing adjustments to her basis first, followed by adjustments that decrease basis.


Definitions:

Red Herring

A preliminary prospectus filed by a company with details about its operations and financials, intended to gauge investor interest before a final prospectus is issued.

SEC

Securities and Exchange Commission, a U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry and stock markets.

Prospectus Approval

The process of getting approval from regulatory authorities for a document offering securities or financial instruments for sale, detailing terms and conditions.

Investment Bank

An organization that assists companies in issuing securities and selling them to investors.

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